Turkish Government "Goes For Gold"; Seeks To "Transfer" Private Gold Holdings Into Bank System

Tyler Durden's picture

Gold may not be 'money' to the Chairman, but it sure is to Turkey. The WSJ reports that "The Turkish government, facing a bloated current-account deficit that threatens to derail the country's rapid expansion, is trying to persuade Turks to transfer their vast personal holdings of gold into the country's banking system." The reason: "The push to tap into the individual gold reserves—the traditional form of savings here—is part of Ankara's efforts to reduce a finance gap that is currently about 10% of gross domestic product." In other words, "sequester" the population's hard assets (politely of course), and convert these to paper to fund the country's creditors, both foreign and domestic. Mostly foreign. In other words, Southeast Europe is slowing becoming the staging ground for the 21st century equivalent of Executive Order 6102, where first Greek, and now Turkish gold, is about to be pulled from point A to point B, where point B is some top secret vault deep under London.

How will Turkey spin gold confiscation in the politest of ways? The WSJ has details:

Government officials say the banking regulator will soon publish a plan to boost incentives for consumers to park their household wealth inside the financial system. Banking executives said they are considering new interest-yielding gold-deposit accounts that would allow savers to withdraw gold bars from specially designed automated teller machines.


The moves come after the central bank in November announced that lenders could hold up to 10% of their local-currency reserves in gold, in part to tempt Turkey's gold hoarders to deposit their jewelry, coins or bullion at banks.


Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against the economic volatility that has periodically hit Turkey in recent decades.


The effort is one front in a broader battle to encourage more savings while curbing the ballooning current-account deficit—a pressure point many investors fear could upend a fast-growing economy, estimated to have expanded more than 8% last year. Turkey's current-account gap has expanded faster than expected in recent weeks amid a surge in oil prices and data showing unexpectedly high consumer demand.

We wish them luck:

For some Turks, the government will have to unveil a lot more sweeteners before they part with the family gold. 

Because what may not be apparent to a Princeton Ph.D., is more than obvious to a 70 year old housewife in Istanbul:

"I'm keen to save, so keeping gold at home is easy for me; there is no complicated procedure," said Ayten Altin, a 70-year-old housewife in Istanbul. "In an emergency, I can convert it to cash and I don't have to wait for the bank to say the asset has matured."


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Harlequin001's picture

You got that right, London it is, not New York...

Old money talks...

The question is, why would anybody want to deposit their gold bullion in a bank?

Surely a safe deposit or vault is preferable...

jus_lite_reading's picture

How much gold is still in Ft Knox? The whole world wants their gold back...

Pladizow's picture

A fool and their "money" are soon parted!

MillionDollarBonus_'s picture

This is a smart move by the Turkish government. It is a crime against humanity to hoard gold and silver when speculators have driven these metals to absurdly high prices. By hoarding metals instead of investing in the economy, goldbugs and silverbugs are impeding economic growth and inhibiting job creation. The Turkish government and banks can now rehypothicate this gold to facilitate credit expansion as a form of monetary stimulus, which helps everybody, not just a few greedy goldbugs.

Pladizow's picture

Attention American Citizens:

O'Bummer wants you to trade in your gold, guns and freedom for a cheeseburger, prozac and free cable!


HungrySeagull's picture

Hay-ul no. Come and get it.

MaggieL's picture

Actually, we mean molon labe

Oh regional Indian's picture

Was thinking of what would happen if they tried it here in India.

And then I realized they already did!!! Gold Loan companies, euphamistically called Non Banking Finaicial Corporations, are mopping it up as Indian's find it harder and harder to pay for that debt driven holiday/car/flat/tractor they could not really afford, especially that floating rate loan they never understood in the first place.

Interesting that they are trying to do it openly in Turkey. 



Oh regional Indian's picture

On what Plad, Gold Loan Companies? I read about it in the news every day. I see things happeningall around me. I speak with common folk. My auto-rickshaw driver had quite a tale to tell today. All about debt.

What are you talking about? And if it is the above, what are you basing your opinion on?


flacon's picture

I always had the sneaky suspicion that when it comes time for us to unload our gold and exchange it for other assets that we would not be taxed. 

DoChenRollingBearing's picture

@ ORI + 1

And I was thinking of what would happen if they tried it here (in the USA).  I would venture to say that almost all of us 1% (those of us who hold physical gold, NOT, the other 1%...) are gun holders as well.

Molon labe, bitchez!

Oh regional Indian's picture

DCRB, here, in India, the rate (!) at which people are getting sucked into debt for a whole bunch of "desires", life's little extras at crazy interest rates (Auto loan is 10-16%, depending as an example).... And because there is so much more "stuff" out there, re-sale prices are terrible. 

All in all, it's not going to end well here, there is no way the PTB do not have a plan for one-sixth of the world's population, especially when it is the largest collective gold-holder on the planet. 

To the PTB, India is probably an above ground gold-mine, being prepped for a little vaccum-cleaner action via Gold Loan Companies.


juggalo1's picture

10 or 16% interest rates are not so bad when inflation is running 6-8%

Oh regional Indian's picture

But what if real inflation is closer to 20 % in essentials and 2% in crap?


akak's picture


There is no "if" about it.

Gully Foyle's picture

Oh regional Indian

Watch the most recent South Park. Features conning elderly out of their money, cash for gold, home shopping networks, and gold jewelry ties to India.

Interesting how all the dots connect in a circle jerk.

redpill's picture

"Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against the economic volatility that has periodically hit Turkey in recent decades."

Obviously, government is supposed to act in the interest of the people, but the Turkish government has shown that is a cheap façade. The people are currently acting WISELY and protecting their savings, but the government wants them instead to act foolishly and risk their financial security because the government is too inept to manage their own finances. If that isn't the perfect example of why, in the end, it is always you versus the state, I don't know what is. I hope the Turkish people tell them to fuck off.

duo's picture

keeping money in their banking system is not in one's economic best interest.  Kind of like buying a GM car.

fockewulf190's picture

The Turkish Central Bank has a knack for chopping zeros off its currency denomination from time to time. You can only ream the public so many times until they show you the bottom of their shoes.

tabasco71's picture

How much longer before the US and the UK and EZ issue polite requests similar to this I wonder?

Bicycle Repairman's picture

"Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against THEFT  that has periodically hit Turkey in recent decades."

All fixed.

I am more equal than others's picture

Gold is going to experience Midnight Express....the citizens are picking up the soap in the shower while the goberment is beating the soles of their feet.  We will take that (oh yeah, we have an army to help use) and give you paper (used toilet paper) - yes, Kevin Bacon, you may have another ...


LowProfile's picture

I see many boating accidents on the horizon...

rufusbird's picture

I hear some guy name Corzine was hired to run the books in the back office operations division...

poor fella's picture

The banks are going to make loans against these holdings correct? So they may not care if it's costume jewelry covered in 20 carat diamonds? Inflated interests payments (still near zero) is nothing compared to the leverage the banks could create. What were the 'assets' the ECB just allowed on their balance sheets?

Are the banks going to have assayers determining values? "The New Tungstun: Not just for fishing lures!"

Blue Horshoe Loves Annacott Steel's picture

Deal!  Sorry, that was the prozac talking.

Gully Foyle's picture


Maybe you should go back on the Prozac.

rehypothecator's picture

I'm finally starting to see through the ignorance and contempt your posts have, and instead actually see the sarcastic humor.  It's been a long, slow and difficult process, however.

poor fella's picture

MDB's best post! I'm almost to the point you've reached.

He's stepping out of the closet - about right here   /s a r _

CIABS's picture

Yes, MDB is becoming comical now.

MeelionDollerBogus's picture

I'm surprised he didn't say that gold has no value to back it unlike bonds and dollars that have the full faith & credit of the US government :D

Catch-22's picture

he has indeed refined his “craft” very nicely


BKbroiler's picture

MDB - never stop trolling, seriously.  You're my favorite one.

Monedas's picture

Million Dollar Boner !   I still give you the benefit of the doubt.....you're pulling our chains and....strings ? Ladies don't have chains to pull !         Gold has no place to hide.....if you hoard it, you retire it from the bidding of the marketplace and enhance the bidding power of all other barter and currency.....in the most egalitarian distribution imaginable !  It's like when you don't vote.....you distribute your voting power equally to all those who do vote !  It is impossible to not contribute....even if you hoard and don't vote !  Monedas   2012   Maybe we could pimp (hypothecate) your ass and use the proceeds to pay down Greek debt ? 

MeelionDollerBogus's picture


you already said that gold & silver have no value

how can it be a crime against anyone to hold onto something you say has no value? Inconsistent-Troll is Inconsistent.

How can anything impede economic growth if it's useless as you say so often? You have no value for gold & silver, you say no one else does so let people hold onto these things you say are useless.

And again I say, no need to rehypothecate gold & silver materials into fraudulent shared holdings where no one can make their claim. Do it to the existing fraudulent bonds & currency paper, issue more of those, don't worry about silly things like land, gold and oil.

You hit -68. Well, it's a tad better but I've seen -390 for you before. Keep trying, mini-B

juggalo1's picture

It impedes economic growth by driving investment into gold and silver mining which are economically unproductive ventures.

MeelionDollerBogus's picture

Of course because it would make much more sense to leverage all gold & silver 100 to 1 then rehypothecate that into corporate bonds to mine for treasuries at the Fed!

juggalo1's picture

Usually you are pretty funny, but this is not sensible on any front.

Raymont's picture

Long live MillionDollarTroll_.

cranky-old-geezer's picture



By hoarding metals instead of investing in the economy, goldbugs and silverbugs are impeding economic growth and inhibiting job creation.

Hmmmmm..... what about those hundreds of billions of "excess reserve" dollars Wall Street banks have parked in Fed accounts? 

You know, money they got when they sold all those worthless MBS to the Fed (at full original value).

Hundreds of billions of "excess reserve" dollars parked in Fed accounts for 3 years now?  Sounds like hoarding to me.

Of course I know it's satire MDB.  Nobody could be so stupid and gullible and brainwashed to actually believe what you say.

MagicHandPuppet's picture

The crime against humanity is the poisonous rubbish coming from you, dip shit